Video 10:24
Sydney housing 'unaffordable'

The NSW Government is asking for public input on its new Metropolitan Strategy Review, as it tries to solve the housing shortage it faces as the city's population grows.

Transcript

QUENTIN DEMPSTER, PRESENTER: There's been a big reaction to our report last week on the housing and affordability crisis facing greater Sydney. Some viewers emailed to say we should have questioned the population growth projections for NSW, now accepted apparently uncritically by both the state Labor and Liberal parties. If we're already in deficit and existing infrastructure can hardly cope with current densities, how can a population increase of nearly two million people over the next 26 years possibly be justified? We'll examine that question shortly.

As part of its metropolitan strategy review announced this week, the Keneally Government is proposing a new agency: the Sydney Metropolitan Development Authority to acquire private property in key sites for rapid redevelopment to drive higher densities. It may be the only way, we're told, to get more dwellings onto the market.

TONY KELLY, PLANNING MINISTER: We have the problem that we need 770,000 homes in the next 25 years. We need 30,000 homes a year. We're not running at that rate at the moment; We're about half that. And unless we change, then our children will not be able to afford to live in Sydney.

QUENTIN DEMPSTER: The Keneally Government is now planning to redevelop with medium and high density apartments existing areas of Sydney with up to 82 per cent in-fill, the rest greenfields housing sites on the fringe. Tony Kelly, former Minister for Local Government, replaced Kristina Keneally as Planning Minister in the blood-on-the-floor reshuffle last December. He's now asking for public input to the Government's just-announced metropolitan strategy review via its website, shapeyourstate.nsw.gov.au.

Last week the Reserve Bank graphically illustrated the housing unaffordability problem facing Australia and particularly NSW. Housing construction - the blue line - has been falling alarmingly, while population growth - the orange line - is on the way up. The cruel consequence: housing in greater Sydney is unaffordable, rents are becoming extortionate.

Ken Morrison from the Property Council has been lobbying for a paradigm shift in Government policy, including a new central authority with overriding acquisition and redevelopment powers.

KEN MORRISON, PROPERTY COUNCIL: Whenever you have significant change, you have people who are concerned about that change. And that's why we think there needs to be a lot of effort into selling the need for change, the fact that we have so much catch-up to do, but also focus where the change is going to be. Let's not just have change spread from one end of Sydney to the other. Let's focus it where it makes sense for it to be. That's why we'd like to see the Sydney Metropolitan Development Authority focus on a relatively small number of urban renewal sites, working off the back of public transport infrastructure, using the arms and legs of State Government. Yes, having a conversation with the community about the change; yes, involving local government; yes, being practical about what can be achieved. But it's going to need State Government at the table with these sort of powers to get it done. Because we have a crisis that's coming.

QUENTIN DEMPSTER: Economics writer Ross Gittins also believes the solution to unaffordability lies in more land release and higher densities.

ROSS GITTINS, ECONOMICS EDITOR, SMH: The real problem is with state governments getting the land out there and the permissions to build medium density blocks of units.

QUENTIN DEMPSTER: But with the Keneally Government proposing a direct intervention through a new powerful agency to acquire and redevelop sites for housing, he warns of a political backlash.

ROSS GITTINS: The problem is we are not building enough additional homes to accommodate all the extra people who are moving to Australia.

QUENTIN DEMPSTER: And we should have a debate in that context about what is a sustainable population, I suppose, for Australia.

ROSS GITTINS: Definitely, definitely

QUENTIN DEMPSTER: Where do you stand on that? Are you a "grow the domestic economy"?

ROSS GITTINS: No. I am very doubtful about a proposition that says bigger is always better, the faster we can grow the Australian population the more wonderful it will be. And I have no doubt that when the public start tracing through the implications of that, the inability of state governments to keep up with high federal immigration policies and the way that that leads to increased congestion on the roads and all the other implications. When the penny drops, the public will say to the politicians, "Cut the immigration," and I don't think that will be a bad thing. And that's even before we get to environmental considerations about have we got enough water and so on.

QUENTIN DEMPSTER: Planning Minister Kelly says the population growth analysis provided to him by Government research analysts concludes that immigration is not the main factor in population growth.

You're not calling on the Rudd Government to think again about its immigration program over the next 10, 20 years?

TONY KELLY: We've got a responsibility for immigration, but immigration is not the problem. The majority of our problem is natural increase, brought about by childbirth, obviously, and the major issue is the fact that we're going to live longer.

QUENTIN DEMPSTER: Ageing population?

TONY KELLY: Ageing population. One of the main statistics is the fact that at the moment one in eight people are over the age of 65. We expect at the end of this period it'll be one in six. Now that's a 25 per cent change. The plain facts are we are living longer and those people who are living longer need to live in houses or, in a lot of cases, their smaller dwelling units as well.

QUENTIN DEMPSTER: For the first time the metropolitan strategy review proposes what's called the Sydney Metropolitan Development Authority. It's modelled on the existing powers of the Sydney Harbour Foreshore Authority to the Hunter Development Corporation to acquire privately owned sites for urban renewal. The proposal hasn't been to Cabinet yet, but Minister Kelly says he's pushing for it.

TONY KELLY: The idea of the Sydney Metropolitan Authority is to try and actually get something done. The Sydney Metropolitan Development Authority will be the authority that gets on and does the work on the ground. So the Department of Planning, in conjunction with Transport, they'll be coming up with the plans, but it'll actually be the Sydney Metropolitan Authority that'll, if you like, bring together all the government departments to make sure that things happen. Now there are a lot of government agencies; they don't necessarily all work together at the one time. There's RTA, there's Rail, there's a whole host of - there's Education, there's Health - a whole host of departments. Lands, for example - one of the things I'm trying to do is make sure we provide cemeteries in these new areas. So there's a whole host that need to be coordinated and we need to have a strategy and a body that can bring them together and make sure that they all arrive at the same place at the same time.

QUENTIN DEMPSTER: And its powers? Are you insistent it will have the power to compulsorily acquire property in key sites?

TONY KELLY: No, I'm not. That's not Government policy. What has occurred is that we've had some suggestions of that. It's been suggested to us by a particular group that there's a good model in London or in England that works, that actually gives, I understand, the property owner some of the value of the uplift from the rezoning. But we're putting out this metropolitan strategy. We want the public now to come and comment on it. On each of the pages there's questions, there's the sorts of things that we want answers on and those sorts of questions are listed there. We'd like people to go online or else do it the old system, by writing to us, to give us their views on those sorts of things before it goes to Cabinet, before we make a decision.

KEN MORRISON: If you're going to go into some of these town centres where you already have established land patterns, it's very difficult to amalgamate the sites to enable a recycling into whatever the new built form should be. Rather than having that not happen, far better for government to come in, use the threat of this to broker a deal when we see these work in the UK and other places, the powers themselves are very rarely used, but there's a gun in the back pocket to broker the deal to make sure that it's in the public's interest, the outcome. Yes, we get the development, we get the growth that we need, but in a way that reflects the public interest and makes the place a better place to be.

ROSS GITTINS: I don't think it ought to be necessary to go that far. I think lot of the problems are just in bureaucracy. I don't know that the problems come from the private sector so we've got to compel the private sector to do things they don't want to do. I don't think we're at that stage.

QUENTIN DEMPSTER: Given the level of housing construction that must be undertaken in Sydney, we're talking about 500 metres each side of a major arterial road, aren't we?

TONY KELLY: All the transport routes, it covers a fair area, it certainly does.

QUENTIN DEMPSTER: So if you live within 500 metres of a major arterial road in greater Sydney you may well face a rezoning?

TONY KELLY: It has the potential to be redeveloped. There is a whole host of areas, for example, around Granville, for example. The locals have come to us and said, "Look, you really need to do something about uplifting our area." And so they're the sorts of things we'll be looking at.

QUENTIN DEMPSTER: The closing date for public submissions to the metropolitan strategy review is 30th April. It remains to be seen if the Keneally Government will have the political courage or take the risk to publish before the state election all the land its proposed new development authority will effectively control throughout Sydney.

Since the dirty, sexy money Wollongong and Planning Department influence peddling candles, polls have consistently shown a lack of public confidence in Labor in government on planning.

Minister, I'm sorry to be cynical, but please assure the public that the chairman of the Sydney Metropolitan Development Authority will not be Graham "Richo" Richardson.

TONY KELLY: (Laughs). You're the first one to suggest that, Quentin. No, he won't be. That's a Cabinet decision. It certainly won't be my suggestion.